EXHIBIT 10.2


 


OFFICEMAX INCORPORATED


Executive Savings Deferral Plan


 


 


Effective January 1, 2005


 





















 


FOREWORD


 


Effective January 1, 2005, OfficeMax Incorporated has adopted the
Executive Savings Deferral Plan for the benefit of certain of its executives and
key employees.


 


This Plan is intended to provide executives and key employees of
OfficeMax and its subsidiaries the opportunity to defer a portion of their cash
compensation and to accumulate deferred compensation that cannot be accumulated
under the OfficeMax Savings Plan because of certain legal, administrative, and plan
document restrictions that are imposed upon the permissible amounts of
contributions that may be made to the OfficeMax Savings Plan.


 


This Plan is an unfunded deferred compensation plan for “a select group
of management or highly compensated employees,” within the meaning of the
Employee Retirement Income Security Act of 1974, as amended.


 


ARTICLE I


DEFINITIONS


 


Except to the extent otherwise inappropriate in the context, the
following terms shall have the following meanings when used in this document.


 


1.1           ACCOUNT
means the balance credited to a Participant’s or beneficiary’s Plan bookkeeping
account, including contribution credits and deemed income, gains and losses
credited thereto.  A Participant’s or beneficiary’s
Account shall consist of a Supplemental Salary Deferral Contributions
Subaccount(s) and a Supplemental Company Matching Contributions Subaccount(s).


 


1.2           ACJA
means the American Jobs Creation Act of 2004 (Section 409A of the Code), as
amended from time to time, and regulations issued thereunder.


 


1.3           BASIC
COMPENSATION means, for a given Plan Year, Compensation not in excess of the
applicable limit prescribed by Section 401(a)(17) of the Code for that Plan
Year.


 


1.4           BASIC
PLAN means the OfficeMax Savings Plan, as in effect from time to time.


 


1.5           BOARD
means the Board of Directors of OfficeMax Incorporated.


 


1.6           BONUS
means the payout amount (if any) earned by a Participant under an incentive
plan of the Company, but only to the extent the award is an annual incentive
award payable in cash.


 


1.7           A
CHANGE IN CONTROL shall be deemed to have occurred if:


 


(a)           Any
Person is or becomes the Beneficial Owner, directly or indirectly of OfficeMax
securities representing 25% or more of either the then outstanding shares of
OfficeMax common stock or the combined voting power of


 





















 


OfficeMax’s then outstanding securities; provided,
however, if such person acquires securities directly from OfficeMax, such
securities shall not be included unless such Person acquires additional
securities which, when added to the securities acquired directly from
OfficeMax, exceed 25% of OfficeMax’s then outstanding shares of common stock or
the combined voting power of OfficeMax’s then outstanding securities; and
provided further that any acquisition of securities by any Person in connection
with a transaction described in Section 1.7(c)(i) shall not be deemed to
be a Change in Control; or


 


(b)           The
following individuals cease for any reason to constitute at least a majority of
the number of directors then serving: 
individuals who, on the date hereof, constitute the Board and any new
director (other than a director whose initial assumption of office is in
connection with an actual or threatened election contest, including but not
limited to a consent solicitation, relating to the election of directors of
OfficeMax) whose appointment or election by the Board or nomination for
election by OfficeMax’s stockholders was approved by a vote of at least 2/3rds
of the directors then still in office who either were directors on the date
hereof or whose appointment, election, or nomination for election was
previously so approved (the “Continuing Directors”); or


 


(c)           The
consummation of a merger or consolidation of OfficeMax (or any direct or
indirect subsidiary of OfficeMax) with any other corporation other than (i) a
merger or consolidation which would result in both (a) Continuing Directors
continuing to constitute at least a majority of the number of directors of the
combined entity immediately following consummation of such merger or
consolidation, and (b) the voting securities of OfficeMax outstanding
immediately prior to such merger or consolidation continuing to represent
(either by remaining outstanding or by being converted into voting securities
of the surviving entity or any parent thereof) more than 50% of the combined
voting power of the voting securities of OfficeMax or such surviving entity or
any parent thereof outstanding immediately after such merger or consolidation,
or (ii) a merger or consolidation effected to implement a recapitalization of
OfficeMax (or similar transaction) in which no Person is or becomes the
Beneficial Owner, directly or indirectly, of OfficeMax securities representing
25% or more of either the then outstanding shares of OfficeMax common stock or
the combined voting power of OfficeMax’s then outstanding securities; provided
that securities acquired directly from OfficeMax shall not be included unless
the Person acquires additional securities which, when added to the securities
acquired directly from OfficeMax, exceed 25% of the then outstanding shares of
OfficeMax common stock or the combined voting power of OfficeMax’s then
outstanding securities; and provided further that any acquisition of securities
by any Person in connection with a transaction described in Section 1.7(c)(i)
shall not be deemed to be a Change in Control of the Company; or


 


(d)           The
OfficeMax stockholders approve a plan of complete liquidation or dissolution of
OfficeMax or the consummation of an agreement for the sale or disposition by


 


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OfficeMax of all or substantially all of OfficeMax’s
assets, other than a sale or disposition by OfficeMax of all or substantially all
of OfficeMax’s assets to an entity, more than 50% of the combined voting power
of the voting securities of which are owned by Persons in substantially the
same proportions as their ownership of OfficeMax immediately prior to such
sale.


 


A transaction described in Section 1.7(c) which is not
a Change in Control solely due to the operation of Subsection 1.7(c)(i)(a) will
nevertheless constitute a Change in Control if the Board determines, prior to
the consummation of the transaction, that there is not a reasonable assurance
that, for at least two years following the consummation of the transaction, at
least a majority of the members of the board of directors of the surviving
entity or any parent will continue to consist of Continuing Directors and
individuals whose election or nomination for election by the shareholders of
the surviving entity or any parent would be approved by a vote of at least
two-thirds of the Continuing Directors and individuals whose election or
nomination for election has previously been so approved.


 


For purposes of this Section, “Beneficial Owner” shall
have the meaning set forth in Rule 13d 3 under the Securities Exchange Act of
1934, as amended (the “Exchange Act”).


 


For purposes of this Section, “Person” shall have the
meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in
Sections 13(d) and 14(d) thereof, except that “Person” shall not include (i) OfficeMax
or any of its subsidiaries, (ii) a trustee or other fiduciary holding
securities under an employee benefit plan of OfficeMax or any of its
subsidiaries, (iii) an underwriter temporarily holding securities pursuant to
an offering of such securities, (iv) a corporation owned, directly or
indirectly, by the stockholders of OfficeMax in substantially the same
proportions as their ownership of stock of OfficeMax, or (v) an individual,
entity or group that is permitted to and does report its beneficial ownership
of securities of OfficeMax on Schedule 13G under the Exchange Act (or any
successor schedule), provided that if the individual, entity or group later
becomes required to or does report its ownership of OfficeMax securities on
Schedule 13D under the Exchange Act (or any successor schedule), then the
individual, person or group shall be deemed to be a Person as of the first date
on which the individual, person or group becomes required to or does report its
ownership on Schedule 13D.


 


1.8           CODE means the Internal
Revenue Code of 1986, as amended.


 


1.9           COMMITTEE
means the Executive Compensation Committee of the Board, or any successor to
the Committee.


 


1.10         COMPANY
means OfficeMax and any of its subsidiaries which may be a participating
employer under the Basic Plan, together with their successors and assigns, or
any other


 


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entity which, with the foregoing’s consent, assumes the
Company’s obligations under this Plan.


 


1.11         COMPANY
MATCHING CONTRIBUTIONS means the contributions made or deemed made by the
Company pursuant to Article IV.


 


1.12         COMPANY
MATCHING CONTRIBUTIONS SUBACCOUNT means the account(s) on the books of the
Company to which a Participant’s Supplemental Company Matching Contributions
under Article IV, plus earnings and losses thereon, are credited.


 


1.13         COMPENSATION
means, for a given Plan Year, a Participant’s Salary and Bonus.  Compensation shall not include any amounts
paid by the Company to a Participant that are not strictly in consideration for
personal services, such as expense reimbursements, cost-of-living allowances,
education allowances, premiums on excess group life insurance, or any Company
contribution to any defined benefit or defined contribution plan sponsored by
the Company; the fact that an amount constitutes taxable income to the
Participant shall not be controlling for this purpose.  Compensation shall not include any taxable
income realized by, or payments made to, a Participant as a result of the grant
or exercise of an option to acquire OfficeMax stock, or compensation resulting
from the acquisition, exercise, or vesting of any stock appreciation right,
stock bonus, restricted stock, restricted stock units, phantom stock,
performance stock, or similar stock-based award under any incentive plan sponsored
by the Company, except to the extent the award is payable in cash or the Committee
determines that the award shall be included in Compensation for purposes of
this Plan.


 


1.14         EFFECTIVE
DATE means January 1, 2005.


 


1.15         ELIGIBLE
EMPLOYEE means a person employed by OfficeMax or a subsidiary who is: (A) eligible
to participate in the Basic Plan, and (B) a “Restricted Highly Compensated
Employee” as defined in the Basic Plan.


 


1.16         ENROLLMENT
AND ELECTION FORM means the form on which
a Participant elects to defer compensation and makes other required
designations.


 


1.17         ENTRY
DATE with respect to an Eligible Employee means the first date that the
Eligible Employee is entitled to commence participation in the Basic Plan.


 


1.18         KEY
EMPLOYEE means a “key employee” as defined under AJCA.


 


1.19         LEGACY
DEFERRED COMPENSATION PLAN means the 2005 Deferred Compensation Plan, which is
a separate plan offered only to certain employees who were employees of Boise
Cascade Office Products Corporation and who had a current deferred compensation
election effective under the 2001 Key Executive Deferred Compensation Plan on
December 31, 2004.


 


1.20         OFFICEMAX
means OfficeMax Incorporated.


 


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1.21         PARTICIPANT
means any Eligible Employee who is eligible and elects to participate in
accordance with the provisions of Article II, including, where appropriate
according to the context of the Plan, any former Eligible Employee who is or
may become (or whose beneficiary may become) eligible to receive a benefit
under the Plan.


 


1.22         PLAN
means the Executive Savings Deferral Plan as set forth herein and as amended
from time to time.


 


1.23         PLAN
YEAR means the calendar year beginning January 1, 2005, and each calendar year
thereafter during which the Plan is in effect.


 


1.24         SALARY
means a Participant’s salary, commission, and other payments for personal
services rendered by a Participant to the Company during a calendar year,
determined prior to giving effect to any deferral election under this Plan.


 


1.25         SALARY
DEFERRAL CONTRIBUTIONS means the contributions of Salary and Bonus made or
deemed made by a Participant pursuant to Article III.


 


1.26         SALARY
DEFERRAL CONTRIBUTIONS SUBACCOUNT means the account(s) on OfficeMax’s books to
which a Participant’s Supplemental Salary Deferral Contributions under Article
III, plus earnings and losses thereon, are credited.


 


1.27         TRUST
means the irrevocable trust established by OfficeMax with an independent
trustee for the benefit of persons entitled to receive payments or benefits
hereunder, the assets of which will be subject to claims of OfficeMax’s
creditors in the event of bankruptcy or insolvency.


 


1.28         TRUSTEE
means the trustee named in the agreement establishing the Trust, if any, and
such successor and/or additional trustees as may be named pursuant to the terms
of the agreement establishing the Trust.


 


1.29         VALUATION
DATE means March 31, June 30, September 30, and December 31 of each Plan Year
and any other date(s) designated as Valuation Dates by the Committee, in its
sole discretion.  Valuations shall occur
at least quarterly within a given Plan Year and may occur more frequently at
the sole discretion of the Committee.


 


ARTICLE II


ELIGIBILITY AND
PARTICIPATION


 


2.1           REQUIREMENTS.


 


(a)           Every
person who is an Eligible Employee on the Effective Date shall be eligible to
become a Participant in this Plan on the Effective Date.  Each person who becomes an Eligible Employee
after the Effective Date shall be eligible to become


 


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a Participant on the first Entry Date occurring on or
after the date on which he or she becomes an Eligible Employee.  No individual shall become a Participant,
however, if he or she is not an Eligible Employee on the date his or her
participation is to begin.


 


(b)           In
order to participate as of the Effective Date or the Entry Date, as applicable,
an Eligible Employee must execute and return to the Committee, within the time
period specified by the Committee, an Enrollment and Election Form on which the
Eligible Employee shall:


 


(i)            Elect
to become a Participant;


 


(ii)           Elect
a rate of Salary Deferral Contributions for the initial Plan Year as provided
in Section 3.1;


 


(iii)          Designate
a beneficiary as provided in Section 9.1;


 


(iv)          Specify
a distribution commencement date for Plan benefits and a form of distribution
of Plan benefits (from among the options indicated on the form);


 


(v)           Specify
a deemed investment fund or funds (in accordance with Section 6.2); and


 


(vi)          Agree
to the terms of the Plan.


 


(c)                                  For
each subsequent Plan Year, within such time period as OfficeMax shall specify before
the beginning of the Plan Year, an Eligible Employee who desires to continue to
participate must execute and return to the Committee an Enrollment and Election
Form on which he/she shall elect a rate of Salary Deferral Contribution as
provided in Section 3.1 with respect to that Plan Year and a distribution
commencement date for Plan benefits and a form of distribution of Plan benefits
(from among the options indicated on the form), with respect to benefits
attributable to deferrals for that Plan Year.


 


(d)           As
provided in Sections 2.1(b)(iv) and 2.1(c), an Eligible Employee may elect a
different distribution commencement date for Plan benefits and/or a different
form of distribution of Plan benefits with respect to deferrals for each separate
Plan Year.  However, the election made
for each Plan Year is irrevocable after that Plan Year has begun, and may not
be subsequently modified, except as otherwise provided in Article VIII.


 


2.2           CHANGE
OF EMPLOYMENT CATEGORY.  During any
period in which a Participant remains in the employ of the Company, but ceases
to be an Eligible Employee, he/she shall cease to be eligible to make Salary
Deferral Contributions or have Company Matching Contributions made on his/her
behalf as of the date he/she is no longer an


 


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Eligible Employee.  However, his/her Account shall continue to be
revalued in accordance with Article VI.


 


ARTICLE III


SALARY DEFERRAL
CONTRIBUTIONS


 


3.1           IRREVOCABLE
ELECTION.  A Participant may elect by
filing with the Company a salary reduction agreement in the form of an
Enrollment and Election Form (pursuant to Section 2.1) to reduce the amount of
Compensation that he/she would otherwise receive as taxable pay for the Plan
Year with respect to which the form relates and to have the Company credit an
equivalent amount to his/her Salary Deferral Contributions Subaccount.  A Salary Deferral Contribution election shall
apply only with respect to Compensation for the particular Plan Year specified
on the election form.  Once the Plan Year
has begun, the Salary Deferral Contribution election with respect to that Plan
Year shall become irrevocable.


 


3.2           CHOICE
OF CONTRIBUTION RATES.


 


(a)           For
each Plan Year, a Participant may elect to make Salary Deferral Contributions of
his or her Salary paid during that Plan Year and his or her Bonus earned during
that Plan Year.  Bonus elections shall
apply to the Bonus earned (if any) during the Plan Year following the
Participant’s election, payable in the second year following the Participant’s
election.


 


(b)           Elections
shall be made in whole percentages.  The
maximum deferral election for Salary is 50% less (i) the maximum contribution
percent applicable to Restricted Highly Compensated Employees under the Basic
Plan (as determined by the plan administrator for the Basic Plan), and
(ii) the deferral percentage the Participant has elected under the Legacy
Deferred Compensation Plan, if applicable. 
The maximum deferral election for Bonus is 90% less (i) the maximum
contribution percent applicable to Restricted Highly Compensated Employees
under the Basic Plan (as determined by the plan administrator for the Basic
Plan), and (ii) the deferral percentage the Participant has elected under
the Legacy Deferred Compensation Plan, if applicable.


 


(c)           Salary
Deferral Contributions shall be deducted from the Participant’s pay and an
equivalent amount shall be credited to the Participant’s Salary Deferral
Contributions Subaccount.


 


ARTICLE IV


COMPANY MATCHING
CONTRIBUTIONS


 


4.1           AMOUNT.  In addition to the Salary Deferral
Contributions made pursuant to Article III above, the Company shall credit to
each Participant’s Company Matching Contributions


 


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Subaccount an amount equal to 50% of the Salary
Deferral Contributions that the Participant has elected in accordance with
Section 3.2, disregarding for this purpose any Salary Deferral Contributions in
excess of Match-Eligible Contributions.


 


4.2           MATCH-ELIGIBLE
CONTRIBUTIONS.  For purposes of
calculating Company Matching Contributions under Section 4.1, “Match-Eligible
Contributions” means six percent (6%) of Basic Compensation less (a) the
maximum contribution percent applicable to Restricted Highly Compensated
Employees under the Basic Plan (as determined by the plan administrator for the
Basic Plan), and (b) the deferral percentage the Participant has elected
under the Legacy Deferred Compensation Plan, if applicable.  If the maximum contribution percent
applicable to Restricted Highly Compensated Employees under the Basic Plan plus
the deferral percentage the Participant has elected under the Legacy Deferred
Compensation Plan (if applicable) is 6% or greater, no Company Matching
Contributions will be made under this Plan.


 


ARTICLE V


VESTING


 


5.1           VESTING.  An Eligible Employee shall always be one
hundred percent (100%) vested in all amounts credited to his/her Salary
Deferral Contributions Subaccount. 
He/she shall vest in amounts credited to his/her Company Matching
Contributions Subaccount in accordance with the following schedules, based on
his/her “Years of Service” as defined in the Basic Plan.


 




	
  Years of Service

  	
   

  	
  Vested Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Less than 3
  years of service

  	
   

  	
  0

  	
  %

  
	
  3 or more years
  of service

  	
   

  	
  100

  	
  %

  






 


A Participant’s Company Matching Contributions
Subaccount also will become 100% vested if, while still employed by the
Company, he/she attains age 65 or dies.


 


 


ARTICLE VI


ACCOUNTS


 


6.1           ACCOUNTS.  The Company will maintain on its books a
Salary Deferral Contributions Subaccount(s) and a Company Matching
Contributions Subaccount(s) for each Participant to which shall be credited, as
appropriate, Salary Deferral Contributions under Article III, Company Matching
Contributions under Article IV, and deemed investment earnings and/or losses as
provided in Section 6.2.  Appropriate
records will be maintained for each Participant, as necessary, to account
separately for Plan benefits that are attributable to deferrals for different
Plan Years to the extent deferrals are subject to different payment option
elections under Section 8.2(a).  All
Accounts shall be bookkeeping accounts only, and all such amounts referred to
therein shall, prior to being


 


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distributed, in all events remain subject to the
claims of the general creditors of the Company who is or was the employer of
the respective Participant.


 


6.2           ADJUSTMENTS.


 


(a)                                  In
accordance with rules established by the Committee, a Participant may elect to “invest”
amounts credited to his Account in and among hypothetical investment funds
which shall mirror the investment funds offered under the Basic Plan from time
to time.  Any election may be changed in
accordance with rules established by the Committee.  If a Participant fails to make such an
election, his/her Account will be deemed to be invested in a default investment
fund chosen by the Committee.


 


(b)                                 As
of each Valuation Date, each Account will be adjusted, with either an increase
or a decrease, to reflect the deemed investment experience of the Account since
the preceding Valuation Date.  For this
purpose, the Account will be adjusted to reflect the investment return under
the Eligible Employee’s deemed investment elections.


 


6.3           ACCOUNTING FOR
DISTRIBUTIONS.  As of the date of any distribution,
the distribution to a Participant or his/her beneficiary shall be charged to
such Participant’s Account.


 


 


ARTICLE VII


ENTITLEMENT TO BENEFITS


 


7.1           VALUATION
OF ACCOUNT.  If a Participant terminates
employment with the Company for any reason, the Participant’s Account shall be
valued as of the Valuation Date coincident with or next following the date of
termination (or the distribution commencement date as elected in the
Participant’s Enrollment and Election Form, if later) and the vested portion of
the Account shall be payable according to the provisions of Article VIII.


 


7.2           SOURCE
OF PAYMENTS.  Benefits under this Plan shall
be payable from general assets of the Company who is or was the employer of the
respective Participant; provided, however, that if OfficeMax has established a
Trust to fund benefit payments hereunder, such payments by the Trust shall be
made only to the extent there are assets in the Trust and any payment due under
the Plan that is not paid by the Trust will be paid by the Company who is or
was the employer of the respective Participant from its general assets.


 


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ARTICLE VIII


PAYMENT OF BENEFITS


 


8.1           CASH
PAYMENTS.  All payments under this Plan
shall be made in cash.


 


8.2           PAYMENT OPTIONS.


 


(a)                                  As
provided in Section 2.1(d), an Eligible Employee may elect a different payment
option for Plan benefits attributable to deferrals for each Plan Year.  Each payment option must be selected by the
Eligible Employee prior to the deferral, pursuant to Sections 2.1(b)(iv) and
2.1(c).  Each payment option shall
provide for payment to the Participant of the vested value of the Participant’s
Account attributable to such deferral as set forth below:


 


(i)            Time
of Distribution.  As soon as administratively
feasible pursuant to Article XI after the Participant’s employment terminates
with the Company and all affiliates other than by reason of death, or at a
later or earlier fixed date, which shall be a calendar quarter end-date, as
specified by the Participant in his/her Enrollment and Election Form at the
time of the deferral election under the Plan.


 


(ii)           Form
of Distribution.  In a single lump
sum, or in approximately equal installments over a period not exceeding fifteen
(15) years, as elected by the Participant in his/her Enrollment and Election
Form at the time of the deferral election under the Plan.


 


(b)                                 Notwithstanding
the foregoing, if a Participant fails to designate properly the manner of
payment of the Participant’s benefit under the Plan, payment will be made in a
lump sum as soon as practicable after the date of the Participant’s termination
of employment.


 


8.3           PAYMENT
UPON DEATH. If a Participant dies (whether before or after payments to the
Participant have begun), the value of the Participant’s Account shall be paid
to the Participant’s beneficiary in a lump sum as soon as practicable
thereafter.


 


8.4           SMALL
BALANCES.  Notwithstanding any provision
of this Plan to the contrary, if at the time of a Participant’s termination of
employment with the Company and all affiliates, the value of his/her vested
Account is less than $10,000, an amount equal to the value of the vested
Account shall be distributed in a lump sum as soon as practicable after the
date of the Participant’s termination, regardless of any elections made by the
Participant to the contrary.


 


8.5           DISTRIBUTIONS
TO KEY EMPLOYEES.  Notwithstanding
anything in this Plan to the contrary, distributions to Key Employees shall
comply with AJCA.


 


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ARTICLE IX


BENEFICIARIES;
PARTICIPANT DATA


 


9.1           DESIGNATION OF
BENEFICIARIES.


 


(a)                                  Each
Participant from time to time may designate any person or persons (who may be
named contingently or successively) to receive any benefits payable under the Plan
upon or after the Participant’s death, and the Participant may change this
designation from time to time by filing a new designation.  If the Participant is legally married at the
time of death, any designation of a Beneficiary other than the Participant’s
legal spouse shall be void, and the Participant’s legal spouse will be the sole
beneficiary, unless the legal spouse has consented to the designation of another
person as beneficiary in a signed and notarized statement.  Each designation will revoke all prior
designations by the same Participant, shall be in a form prescribed by the Company,
and will be effective only when filed in writing with the Company during the
Participant’s lifetime.


 


(b)                                 In
the absence of a valid beneficiary designation, or if, at the time any benefit
payment is due to a beneficiary, there is no living beneficiary, the Company
shall cause the benefit payment to be paid to the Participant’s spouse, or, if no
spouse is then living, to the Participant’s estate.  In determining the existence or identity of
anyone entitled to a benefit payment, the Company may rely conclusively upon
information supplied by the Participant’s personal representative, executor, or
administrator.  If a question arises as
to the existence or identity of anyone entitled to receive a benefit payment,
or if a dispute arises with respect to any benefit payment, then,
notwithstanding the foregoing, the Company, in its sole discretion, may cause the
payment to be distributed to the Participant’s estate without liability for any
tax or other consequences that might flow therefrom or may take such other
action as the Company deems appropriate.


 


9.2           INABILITY
TO LOCATE PARTICIPANTS OR BENEFICIARIES. 
Any communication, statement, or notice addressed to a Participant or to
a beneficiary at his or her last mailing address as shown on the Company’s
records shall be binding on the Participant or beneficiary for all purposes of
the Plan.  The Company shall not be
obliged to search for any Participant or beneficiary beyond sending a
registered letter to the last known address. 
If the Company notifies any Participant or beneficiary that he/she is
entitled to an amount under the Plan and the Participant or beneficiary fails
to claim such amount or make his/her location known to the Company within three
(3) years thereafter, then, except as otherwise required by law, the Company shall
have the right to direct that the amount payable shall be deemed to be a
forfeiture, except that the dollar amount of the forfeiture, unadjusted for
deemed gains or losses in the interim, shall be paid by the Company if a claim
for the benefit subsequently is made by the Participant or the beneficiary to
whom it was payable.  If a benefit
payable to an unlocated Participant or beneficiary is subject to escheat
pursuant to applicable state law, the Company shall not be liable to any person
for any payment made in accordance with such law.


 


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ARTICLE X


THE TRUST


 


10.1         FUNDING
OF TRUST.  Upon the occurrence of a
Change in Control or at any time thereafter, the Company, in its sole
discretion, may transfer to the Trust cash, marketable securities, or other
property acceptable to the trustee to pay the Company’s obligations under this
Plan in whole or in part (the “Funding Amount”).  Any cash, marketable securities, or other
property so transferred shall be held, managed, and disbursed by the trustee
subject to and in accordance with the terms of the Trust.  In addition, from time to time the Company may
make additional transfers of cash, marketable securities, or other property
acceptable to the trustee as desired by the Company in its sole discretion to
maintain or increase the Funding Amount with respect to this Plan.  The assets of the Trust, if any, shall be
used to pay benefits under this Plan, except to the extent the Company pays
such benefits.  The Company and any
successor shall continue to be liable for the ultimate payment of those
benefits.


 


10.2         BENEFIT
PAYMENTS IN ABSENCE OF TRUST.  To the extent
the Company does not fund the Trust or to the extent the Funded Amount is
insufficient to pay benefits under this Plan, benefit payments shall be made
from the general assets of the Company who was or is the employer of the
respective Participant.  The Company and
any successor shall continue to be liable for the ultimate payment of those
benefits.


 


ARTICLE XI


ADMINISTRATION


 


11.1         GENERAL
ADMINISTRATION.  The Company, acting
through its senior human resources officer or his or her delegates, shall have final
discretion, responsibility, and authority to administer and interpret the
Plan.  This includes the discretion and
authority to determine all questions of fact, eligibility, or benefits relating
to the Plan.  The Company may also adopt
any rules it deems necessary to administer the Plan.  The Company’s responsibilities for
administration and interpretation of the Plan shall be exercised by Company
employees who have been assigned those responsibilities by the Company’s
management.  Any Company employee
exercising responsibilities relating to the Plan in accordance with this
section shall be deemed to have been delegated the discretionary authority
vested in the Company with respect to those responsibilities, unless limited in
writing by the Company.  Any Participant
may appeal any action or decision of these employees to the Company’s senior
human resources officer.  Claims for
benefits under the Plan and appeals of claim denials shall be in accordance
with Section 11.3.  Any interpretation by
the Company’s senior human resources officer shall be given deference and shall
be final and binding on the Participants.


 


11.2         AMENDMENT
AND TERMINATION.  The Committee may, at
its sole discretion, amend or terminate the Plan at any time, provided that any
amendment or termination shall not reduce the amount of a Participant’s Account
as of the date of the amendment or


 


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termination or adversely affect a Participant’s
entitlement to his/her Account as of that date.


 


11.3         CLAIMS
PROCEDURE.


 


(a)                                 Notice
of Claim.  Any Participant or beneficiary,
or the duly authorized representative of a Participant or beneficiary, may file
a claim for a Plan benefit. Claims for benefits under the Plan shall be filed
in writing, within 90 days after the event giving rise to a claim, with the
Company’s benefits manager (the “Manager”), who shall have absolute discretion
to interpret and apply the Plan, evaluate the facts and circumstances, and make
a determination with respect to the claim in the name and on behalf of the
Company.  The claim shall include a
statement of all facts the Participant believes relevant to the claim and
copies of all documents, materials, or other evidence that the Participant
believes relevant to the claim.  Written
notice of the disposition of a claim shall be furnished to the Participant
within 90 days after the application is filed. 
This 90-day period may be extended an additional 90 days for special
circumstances by the Manager, in his or her sole discretion, by providing
written notice of the extension to the claimant prior to the expiration of the
original 90-day period.


 


(b)                                 Action
on Claim.  If the claim is denied, the
Manager (or his or her designee) shall provide a written notice of denial,
setting forth, in a manner calculated to be understood by the claimant:


 


(i)             The
specific reason or reasons for the denial;


 


(ii)            The
pertinent Plan provisions on which the denial is based;


 


(iii)           A
description of any additional material or information necessary for the
claimant to perfect the claim and an explanation of why such material or
information is necessary;


 


(iv)          An
explanation of the Plan’s claim review procedure; and


 


(v)           A
statement of the claimant’s right to bring an action under section 502(a) of
ERISA following an adverse determination on review.


 


(c)                                  Review
of Denial.  Within sixty (60) days
after receipt of the written notification of denial provided for in Section 11.3(b),
the claimant or the claimant’s duly authorized representative, upon written request
to the Manager, may review pertinent documents, may request review of the
claim, and may submit to the Manager, in writing, issues and comments
concerning the claim.


 


(d)                                 Decision
on Review.  Upon receipt of a request
for review as provided in Section 11.3(c), the Manager shall promptly inform
the Company’s senior human resources officer, who shall be the named fiduciary
of the Plan for purposes of


 


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claim review.  The senior human resources officer shall make
his or her decision, in writing, within 60 days after receipt of the claimant’s
request for review.  This 60-day period
may be extended an additional 60 days if, in the senior human resources officer’s
sole discretion, special circumstances warrant the extension and if the senior
human resources officer provides written notice of the extension to the
claimant prior to the expiration of the original 60-day period.  The senior human resources officer’s decision
shall be written in a manner calculated to be understood by the claimant and
shall include the following:


 


(i)             The
specific reason or reasons for the denial;


 


(ii)            The
pertinent Plan provisions on which the denial is based;


 


(iii)           A
statement that the Participant/beneficiary is entitled to receive at no charge
upon written request reasonable access to and copies of all documents, records,
and other information relevant to his/her claim; and


 


(iv)          A
statement that the claimant has the right to bring an action under section
502(a) of ERISA.


 


(e)                                  No
lawsuit claiming entitlement to benefits under this Plan may be filed prior to
exhausting the claim and claim review procedures described in this Section 11.3.  Any such lawsuit must be initiated no later
than (a) one year after the event(s) giving rise to the claim occurred, or (b)
60 days after a final written decision is provided to the claimant under
Section 11.3(d), whichever is later.  Any
legal action involving benefits claimed or legal obligations relating to or
arising under this Plan may be filed only in Federal District Court in the city
of Itasca, Illinois.  Federal law shall
be applied in the interpretation and application of this Plan and the
resolution of any legal action.  To the
extent not preempted by federal law, the laws of the state of Delaware shall
apply.


 


11.4         FORM
OF COMMUNICATION.  Any election,
application, notice, claim, or other communication required or permitted to be
made by a Participant or beneficiary shall be made in writing and in such form
as the Company may prescribe.  Such
communication shall be effective upon receipt by the Company’s benefits manager
at 150 Pierce Road, Itasca, IL  60143.


 


ARTICLE XII


MISCELLANEOUS PROVISIONS


 


12.1         LIMITATION OF
RIGHTS.  Nothing contained in this Plan
shall be construed to:


 


(a)                                  Limit
in any way the right of the Company to terminate an Eligible Employee’s
employment at any time; or


 


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(b)                                 Be
evidence of any agreement or understanding, express or implied, that the
Company will employ an Eligible Employee in any particular position or at any
particular rate of remuneration.


 


12.2         NONALIENATION
OF BENEFITS.  No amounts payable
hereunder may be assigned, pledged, mortgaged, or hypothecated, and, to the
extent permitted by law, no such amounts shall be subject to legal process or
attachment for the payment of any claims against any person entitled to receive
the same; provided that a Participant’s rights and interests may be assigned or
transferred upon the Participant’s death, as described in Sections 8.3 and 9.1.


 


12.3         UNFUNDED
PLAN.  The Plan is “unfunded and is
maintained primarily for the purpose of providing deferred compensation for a
select group of management or highly compensated employees,” within the meaning
of Sections 201(2), 301(a)(3) and 401(a)(1) of the Employee Retirement Income
Security Act of 1974, as amended (ERISA). 
It is the intention of the Company that the Plan be unfunded for tax and
ERISA purposes and that it be construed and interpreted accordingly.  Except as provided in Article X, Participants
and their beneficiaries, heirs, successors, and assigns shall have no legal or
equitable rights, interest, or claims in any property or assets of the
Company.  The assets of the Company shall
not be held under any trust for the benefit of Participants, their
beneficiaries, heirs, successors, or assigns, or held in any way as collateral
security for the fulfilling of the obligations of the Company under this
Plan.  Any and all Company assets shall
be, and remain, the general, unpledged, unrestricted assets of the
Company.  The Company’s obligation under
the Plan shall be an unfunded and unsecured promise of the Company to pay money
in the future.


 


12.4         GENDER
AND NUMBER.  Wherever used in this Plan,
the masculine shall be deemed to include the feminine, and the singular shall
be deemed to include the plural, unless the context clearly indicates
otherwise.


 


12.5         GOVERNING
LAW.  This Plan shall be construed in
accordance with, and shall be governed by, the laws of the State of Delaware to
the extent such laws are not preempted by federal law.


 


12.6         CHANGES
IN DEEMED INVESTMENTS/CONVERSIONS. 
Notwithstanding any provision of the Plan to the contrary:


 


(a)                                  In
the event of any conversion, change in recordkeepers, change in investment funds
under the Basic Plan and/or a Plan merger or spin-off, the Company, in its sole
and absolute discretion (subject to the requirements of applicable law), may
temporarily suspend, in whole or in part, certain Plan transactions, including
without limitation, the right to change contributions, the right to change
deemed investment elections and/or the right to receive a distribution.


 


(b)                                 In
the event of a change in investment funds under the Basic Plan and/or a Plan
merger or spin-off, the Company, in its sole and absolute discretion, may
decide to map deemed investments under this Plan in a manner similar to the
mapping of


 


15





















 


under the investments in the Basic Plan.  If deemed investments are mapped in this manner,
the Participant shall be permitted to reallocate his/her Account balance among
the deemed investment funds (in accordance with the provisions of Section 6.2)
after any suspension period as described in subsection (a) is lifted.


 


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